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County Will Assume $1M Cost To Fund SDAT Office

BERLIN – With Gov. Martin O’Malley introducing his proposed fiscal year 2012 budget last week, it appears on the surface to be a case of good news, bad news for Worcester County in terms of absorbing expenses paid by the state in the past.

As promised, O’Malley’s budget introduced last Friday did not include an earlier proposal to shift the teacher pension program off to the counties. The governor’s budget advisors had recommended passing as much as 40 percent of the teacher pension costs off to the counties, a move that would save the state an estimated $340 million per year, but O’Malley vowed at the opening of the General Assembly session he had taken the proposal off the table and made good on the promise when he introduced his budget last week.

It’s uncertain just what Worcester’s share of the teacher pension costs would have been had the governor followed through on the budget shift, but early estimates ranged from around $3 million to as high as $7 million. However, while the governor did not shift the teacher pension responsibility, under his budget the counties would pay for a portion of their jurisdiction’s State Department of Assessment and Taxation (SDAT) office.

Essentially, it appears Worcester is off the hook, for the moment at least, on the teacher pension expense, which would have cost the county anywhere from $3 million to $7 million. However, absorbing the cost of paying for the state’s assessment office, which assesses real estate values in the county for the purpose of determining property taxes, will likely cost Worcester an estimated $1 million in new spending.

While not entirely happy with absorbing the cost of running the local SDAT office, the news could have been much worse, according to County Commissioner President Bud Church.

“Given my choice, I’d much rather absorb the cost of running the assessment office than taking on the teacher pensions,” he said. “I’m hoping the teacher pensions are off the board because if we had to take on both, we’d be in deep trouble.”

Church said the state passing the expense of running the assessment offices off to the counties did not come as a complete surprise. What is uncertain, however, is how the county’s share will be determined.

Church said the level of local funding will likely be determined by the size of the staff needed to complete the annual assessments, which could be significant given the volume of assessable real estate in Worcester.

“We’ve anticipated the assessment office would be passed off to the counties,” he said. “We aren’t happy about it, but given the alternative, we’re cautiously optimistic we can live with it.”

Delegate Mike McDermott (R-38B) said this week the formula for determining the local share of running the state assessment office will likely be based on the value of real estate in each jurisdiction.

“That could be significant for Worcester,” he said. “I think the formula is based on the number of assessments and that’s another thing the county will have to absorb.”

Shouldering fiscal responsibility for the state assessment office could be just the tip of the iceberg in terms of increased expenses or further cuts for the counties. O’Malley introduces his version of the budget and the legislature then gets a crack at it before the final spending plan is passed. Church cautioned the teacher pension issue might not be resolved.

“There are still some other cuts coming to the county,” he said. “Until we get through that last day of the session, we won’t know exactly what they are. When it comes to state funding, we always get the short end of the stick and when it comes to cuts, it seems like we always get the long end of the stick.”

However, upon closer inspection, it appears the governor’s budget could include more funding for Worcester this year than it received last year, according to McDermott.

“It looks like Worcester might get more money than last year by a little bit, but the county is still near the bottom of the list when it comes to per capita state aid,” he said.

McDermott said it appears the governor’s budget increases state aid to Worcester by about $1.2 million, representing an increase of around 3.7 percent. By comparison, Wicomico County will likely see its state contribution reduced by about 1.3 percent.

However, Worcester is still near the bottom in terms of per capita state aid at around $693. By comparison, Baltimore City is at the top in per capita state aid at $1,839, while neighboring Wicomico is near the middle at $1,470.

While further cuts in state aid are likely coming for the counties, Senator Jim Mathias (D-38B) said the governor’s proposed budget is not as bad as it could have been for local jurisdictions.

“If you come in the middle of the movie, you might have a different idea about how it turns out,” he said. “Throughout this process, we’ve tried to hold harmless local government as much as we could and we went through a couple rounds of cuts without harming local jurisdictions.”